Faced with a torrent of illegal downloads, film companies have been busy signing internet distribution agreements in recent weeks to try and convert the broadband generation into lifelong paying customers. In the US, major studios including MGM, Paramount and 20th Century Fox have given their backing to Movielink, a new online service which will allow fans to download films on the same day they are released on DVD.

In the UK and Ireland, Lovefilm, Europe's largest online DVD rental company, has just agreed a deal with Universal to provide a similar service and to enable users to view a film from the studio's online library at the click of a mouse.

In an even more startling development last week, Disney, which owns US broadcaster ABC, announced that broadband users would be able to view episodes of TV series Lost and Desperate Housewives over the next two months on the internet - for free.

Fans of the shows shouldn't get too excited, however. RTE, which has the Irish distribution rights, does not anticipate losing viewers as a result of Disney's move. The shows will be streamed in the US only using an "open access closed delivery system", says a spokesman. "In other words, upon request of viewing for any such programme the streamed delivery will be geofiltered, ensuring that only US broadband customers will be able to watch them." The studios are encouraging consumers toward legitimate download sites in an effort to staunch the flow of lost revenue due to online piracy.

According to Benjamin Lehmann, an analyst with technology research and consultancy firm Jupiter Research, the number of European internet users watching video online has more than doubled over the past three years. Just 6% of internet users in the EU regularly watched video content in 2002. By last year that had grown to 13%.

The problem is that, because of poor quality and because people have grown used to downloading free (and often illegal) content, the same users seem less willing to pay for what they watch. Another Jupiter survey shows only 9% of European internet users are willing to pay for video content, compared to 13% in 2002.

This might be the rationale behind Disney's free trial.

Lehmann says it can be seen as an attempt to show consumers that studio-backed download services are of much higher quality and to assess the level of demand for the content.

"It's a nascent market and players who are entering the market are doing so in order to gain feedback and to change perceptions. I think that's the first step to monetising the content, " he says.

The studios' new-found enthusiasm for the internet is proving infectious. Even in Ireland, with its low rates of internet usage and poor availability of broadband - a prerequisite for any film fan planning to view their the latest releases over the web - the revolution is starting to take hold.

Screenclick, Lovefilm's Irish subsidiary, is set to launch its own film download service within the next month.

Cable TV and internet provider Magnet is also getting in on the act. Magnet has been testing a video-on-demand service with several hundred of its customers. It is negotiating with several studios to add more content, including the all-important new film releases, before the service goes live early this summer.

"The studios are breaking their traditional distribution model. More and more highprofile producers have taken a leaf out of where the music industry has gone, " says Magnet director Charlie Ardagh.

Studios have been encouraged by the success of Apple's iTunes. The music industry once saw the words "internet" and "piracy" as synonyms. It has now learned, thanks largely to the popularity of iPod music players and the iTunes website, that music fans will pay to download songs if the price is right and the service is good enough.

Ardagh says there is every reason to believe the same will hold true for the film industry.

There is no question but that there is demand for such a product, he says, noting that satellite broadcaster Sky signed up a million customers for its Sky by broadband film download service, launched in the UK and Ireland earlier this year, in its first three months.

"People are attracted to it, " says Ardagh. "The challenge for us is to get the content that people will want to download."

Magnet sees the films-ondemand service as a key selling point for its cable broadband and telephone service. Ardagh says the company is "trying to make broadband a little bit more entertaining".

Screenclick founder Frank O'Grady is of a similar mind.

O'Grady, who sold the company to Lovefilm earlier this year but stayed on as chief executive, is putting the final preparations to its online film service. "We're hoping to have it within the next four weeks, " he says. Screenclick lets users stream a new release directly to their PC for �?�4 to �?�5.

O'Grady says customers will "sooner rather than later, be able to buy a set-top box" allowing them to download a film and watch it on their television. Lovefilm is pioneering such a service in the UK.

He does not believe, however, that film downloads will be an instant hit with Irish audiences. The low penetration of broadband is a significant barrier. "It's not our core business and it's not going to be hugely profitable initially, " says O'Grady.

Screenclick has about 10,000 regular users, renting 30,000 DVDs a month. O'Grady says offering downloads is a natural extension. The company is also in talks with broadband providers, including Eircom, about entering a partnership to push video-ondemand services.

Ironically, while Hollywood studios see such services as a way to capitalise on the broadband revolution across the US and EU, O'Grady sees them as a way to entice Irish customers to try broadband.

"Movies and games are the two big drivers for broadband, which is how it should be. It's not about just downloading data files at work, " he says.